Mining Giant Digs Deep to Pick Up WMC for [Pounds Sterling]5bn; CITY BRIEFING

Mining Giant Digs Deep to Pick Up WMC for [Pounds Sterling]5bn; CITY BRIEFING

Article excerpt

MINING giant BHP Billiton has finally won control of copper and uranium miner WMC resources in a A$9.2 billion ([pounds sterling]5 billion) deal that just beat today's deadline for acceptance.

Dual-listed BHP Billiton, the world's largest mining company, today said it had secured 55.45% of WMC. News that the deal has been sealed helped lift BHP's shares in both London and Sydney.

The acquisition will make BHP the world's second-largest copper producer after Chile's state-owned Codelco, and the third-largest nickel producer after Russia's Norilsk Nickel and Canada's Inco.

"BHP Billiton expects that a meeting of the WMC board will be convened early next week for changes to be made to the board's composition, as a result of BHP Billiton becoming the majority shareholder,'' BHP chief executive Chip Goodyear said.

The company beat London-listed rival Xstrata to WMC, which is considered a major prize because of the huge uranium deposits at its Olympic Dam site in Australia.

But the deal was unexpectedly longwinded with BHP struggling to gain momentum in acceptances as rumours swirled that rival Rio Tinto was also preparing a bid.

BHP had yesterday secured just 30% of WMC. Questioned earlier in the week about the bid, it admitted an administrative glitch that excluded acceptances sent by fax had added to its problems.

WMC chairman Tommie Bergman had urged his shareholders to accept, saying the offer was "as good as it is going to get unless we get a higher offer come in this week, which is highly unlikely".

BHP sealed the deal after Xstrata's tilt at the company was subjected to extraordinary nationalistic attacks by Australian politicians who said uranium was too sensitive a resource to be put in the hands of foreigners.

The country's chief finance minister had to step in to the debate and clear the way for the takeover.